Soon your phone might share a lot of information about you with advertisers. And although that might make you nervous, some advertisers hope it will also unleash a flood of more targeted, and thus more useful, ads.
This week, Ringleader Digital, a New York-based mobile ad network is launching an experimental version of what it calls a "media stamp"--a technology it hopes will become as widespread as "cookies" on the Web.
Cookies are one of the behind-the-scenes keys to unlocking the value of digital advertising. Though they are little more than small software files that Web page servers attach to users' computers to identify them, they are nearly ubiquitous and enable advertisers to track users wherever they travel on the Web.
Wireless carriers typically prevent outside firms from embedding such information in mobile devices. "The carriers strip off third-party cookies," says Bob Walczak, chief executive of Ringleader Digital. To get around the carriers, Ringleader Digital embeds its digital stamp in servers rather than browsers.
Here's how it works: The stamp or cookie is placed on individual publisher sites--such as ESPN--and captures user data by tracking up to 100 "discriminators," such as a user's time zone, mobile browser and mobile Web bookmarks.
After weighing these factors, the stamp assigns each user a unique digital descriptor. Because the technology lives on site servers, it will work on nearly all Web-enabled phones, regardless of carrier. Nothing is downloaded to the phone and the stamp is designed to last for the life of the device. "There is no way to lose the cookie," says Walczak. "Even if you hard reset your phone, the stamp can persistently identify it."
Such stamps are likely to appeal to agencies and publishers who want more detail about who is viewing their ads. "The ability to serve extremely targeted ads is an absolute necessity on a mobile platform," says Daniel Taylor, a Yankee Group senior digital media analyst. "Anything that automates the process of targeting ads to mobile users is money in the bank."
But the strategy is also likely to make privacy advocates howl. The ads, which will follow the basic banner format, won't look different from others. Walczak is braced for privacy concerns. He notes that the stamp won't store personally identifiable information, will comply with guidelines outlined by the Interactive Advertising Bureau (IAB) and Mobile Marketing Association and will let consumers to opt-out of some forms of tracking.
"Advertisers will know things like you're a female, age 18 to 34, who owns a dog, rents an apartment and is in the market to buy a new car," says Yankee Group's Taylor. "It's not about collecting your name and phone number."
Walczak plays up the value of such pervasive data, which would know what a user looked at online and when he or she returned to a particular site. Advertisers could use the information to "retarget" consumers--offering a 15% coupon to someone who didn't respond to an earlier 10% discount offer, for instance. Brands could run a series of sequential ads on each page of a long story. Currently, about all an advertiser can tell is what type of phone someone is using--say, an iPhone versus a BlackBerry.
Trials of the technology are beginning in mid November. So far, ESPN, mobile content provider Thumbplay and local search site go2--as well as agencies including Avenue A/Razorfish--have signed on for the experiment. Ringleader is planning a global launch by the end of the year. Walczak says publishers will likely charge advertisers more for ads that use the technology.
Tim Solt, senior vice president of sales for go2, believes the technology will enable his Boston-based firm to fine tune its sprawling network of mobile Web sites by providing more information about users.
"The ability to follow users beyond the go2 site will help us create a better experience for those users when they return," asserts Solt. Go2's Web pages, which cover movies, sports, weather, restaurants and travel, currently attract about 2.5 million unique users per month, he says.
Sumit Agarwal, product manager for Google (nasdaq: GOOG - news - people ) Mobile in North America, says that Google has "no moral issue" with mobile cookies. "Allowing users to have their username or password available to a given service would be useful," he says. "The big issue is the right user experience...whatever we use [has to] add value, offer proper education and awareness for users and give them full control."
Eventually, Walczak aims to push into mobile applications, games, 411 calls and mobile videos and expand the technology to other types of digital devices, such as signs and in-car GPS systems. After two years of tweaking the technology, he is betting carriers won't be able to block it. "The stamp is located in [Web site code]," he says. "They would have to take down the mobile Web to get at it."
